​Tesla and Panasonic to establish world’s biggest battery plant

Electric car maker Tesla Motors and electronics giant Panasonic have signed an agreement to build the world’s biggest plant to produce batteries which will be known as the Gigafactory.

“The Gigafactory is
being created to enable a continuous reduction in the cost of
long range battery packs in parallel with manufacturing at the
volumes required to enable Tesla to meet its goal of advancing
mass market electric vehicles, “ says Tesla’spress release.

According to the agreement, Tesla will prepare, provide and
manage the land, buildings and utilities, while Panasonic will
manufacture and supply cylindrical lithium-ion cells and invest
in the associated equipment

Tesla says the plant will require investment of up to $5 billion
and employ up to 6,500 people. But the Japanese battery maker
didn't disclose key details on how much it will invest in the
project.

Earlier Tesla discussed Panasonic's involvement in the project to
establish production of lower-cost advanced batteries needed in
future Tesla vehicles later this decade.

Five US states, California, Nevada, Arizona, New Mexico and Texas
are in the running to be home to the new plant.

Tesla expects the new factory producing lithium-ion cell to be a
money spinner, as the demand for electric vehicles grows,
manufacturing costs will fall due to scaling of production.

Currently Tesla has only one model in production, the Tesla S
sedan. However, the manufacturer plans to launch the Tesla X
crossover late next year. A new small sedan called the Tesla III
is expected to be announced in 2017.